Saving for a rainy day is wise. But do it the smarter way. Here’s what I mean:

Many business owner’s I’ve known over the years aren’t the only income in the household. The money they make is a bonus. So they leave it piling up in their business checking account for a rainy day.

However, this isn’t the best use of your money! Your checking account usually doesn’t pay interest and if it does you’ll get 4 cents per month….

Instead, pay yourself and put that money into a high yield savings account so you can earn interest.

You can still save it for a rainy day, just earn some interest while doing it.

If you’re an entrepreneur who doesn’t know how to pay yourself this post is for you. I know it can be confusing, so I’m here to clear it up so this doesn’t hold you back anymore.

If you’re an LLC or sole-proprietor, simply transfer money from your business to your personal accounts. You can write a check or do a bank transfer. This money will be categorized as Owner’s Pay on the balance sheet. It is not a business expense.

If you’re a S or C Corporation, you’ll pay yourself as an employee on payroll along with distributions to maximize tax benefits. Every state and situation is different, so ask your bookkeeper or accountant for details.

Need help with your payroll? I offer this service to my monthly clients!

Did you know that some entrepreneurs are afraid to pay themselves?

One of the biggest fears entrepreneurs have is that if they take money out of their business, they won’t have enough left to cover expenses. And this can be a legitimate fear. Sometimes you don’t have enough to keep the business afloat. But this is actually a symptom of a deeper problem (either overspending or undercharging, but that isn’t the purpose of this post).

Your business needs to be profitable enough to support both your business expenses and YOU. If you never take a paycheck, your business might not be sustainable long term.

Waiting for the "perfect time" to start paying yourself rarely works. If you keep putting it off, you’ll get stuck in a cycle where your business always comes first, and you never see the rewards of your hard work.

The Solution: Start small. Even if it’s just 5-10% of income, build the habit of paying yourself consistently. If your business can’t handle that, it’s a sign you need to adjust pricing or cut unnecessary expenses.

Your business should serve you—not the other way around. Start paying yourself and watch how your mindset and finances shift!